....And Reap Limited Harvest in Geneva - Elinor Wakefield

The agreements reached at the WTO’s General Council meeting in Geneva at the end of July this year were either “historic” or “hollow” depending whom you listened to. But by any account, the WTO system, along with the both the opportunity and the distrust it engenders, has been salvaged from the disarray of Cancun. In fact, some of the worst fears of the G21 (now G20) were averted.

Three of the ‘Singapore Issues’, pushed heavily by the EU at Cancun, were withdrawn from the Geneva negotiations. Only one – trade facilitation – remains, under which developing countries will have to develop rules to make customs procedures easier and less expensive for business.

On paper, developing countries achieved even more, including promises from rich countries that all farm export subsidies eventually be abolished and an immediate 20% cut in the maximum permitted export payments by rich nations. Poorer countries in turn committed themselves to the eventual opening of their markets to the import of industrial goods and services. This progress was enough for some of the ‘big hitters’ to come away happy.

Celso Amorim, Brazil’s foreign minister and leader of the G20 developing countries said, “It’s a good deal for trade liberalisation and it’s a good deal for social justice, with liberalisation and social justice coming together in the elimination of [farm export] subsidies.”

However, the talks in Geneva still leave a lot of room for manoeuvre: they established only a framework for talking about these issues. Hard deadlines on agricultural liberalisation, and the size of reductions on particular commodities, form the real substance of agreements, and will continue to be debated hotly, at least until December 2005, and perhaps even until 2006 or 2007. For example, countries will have the right to keep higher tariffs on some of the products they consider most important - that is, politically sensitive. Europe’s lucrative sugar beet industry, for one, is exempted. And while the subject of US cotton subsidies is now on the table for discussion again, detailed plans for reducing them are still a long way off.

What does this mean for the future of the WTO and the place of developing countries within it? Well, the WTO’s legitimacy seems to have been restored following the crisis in Cancun, and poor countries have definitely won concessions based on the stance they took there. But the US and EU have not been generous – there is everything to work for as the structure of the agreement is hammered out. Eleven months on, the lesson from Cancun is that developing countries can effectively challenge, though not overturn, the received hierarchy of global terms of trade.

Further reading

Action Aid, July 2004, ‘Divide and Rule: the EU and US Response to developing country alliances at the WTO’.

Elinor Wakefield currently works as a Researcher on Int’l Development Issues at Birmingham University.